Table 1 Estimated parameters of the... | Emerald Publishing

Table 1

Estimated parameters of the proposed model

Parameter	Prior mean	Post sd	Dist.	Rational approach		Behavioral approach
Parameter	Prior mean	Post sd	Dist.	Post mean	Prior sd	Post mean	Prior sd
Intertemporal discount factor $(β)$	0.989	0.05	normal	0.9897	0.0005	0.9896	0.0005
IES $(σ)$	1.3	0.05	normal	1.2911	0.0485	1.2724	0.0486
Interest rate smoothing $(γ_{r})$	0.5	0.25	beta	0.9138	0.0185	0.9529	0.0141
Inflation $(γ_{π})$	1.5	0.75	gamma	1.4571	0.2656	1.884	0.7394
GDP $(γ_{y})$	0.5	0.25	gamma	1.3017	0.98	0.6231	0.2135
Primary surplus $(ϕ_{s})$	0.5	0.05	beta	0.4766	0.0475	0.4721	0.0472
Government deficit $(ϕ_{b})$	0.05	0.05	Inverse gamma	0.0493	0.0075	0.0544	0.0089

Parameter	Prior mean	Post sd	Dist.	Rational approach		Behavioral approach
Parameter	Prior mean	Post sd	Dist.	Post mean	Prior sd	Post mean	Prior sd
Intertemporal discount factor $(β)$	0.989	0.05	normal	0.9897	0.0005	0.9896	0.0005
IES $(σ)$	1.3	0.05	normal	1.2911	0.0485	1.2724	0.0486
Interest rate smoothing $(γ_{r})$	0.5	0.25	beta	0.9138	0.0185	0.9529	0.0141
Inflation $(γ_{π})$	1.5	0.75	gamma	1.4571	0.2656	1.884	0.7394
GDP $(γ_{y})$	0.5	0.25	gamma	1.3017	0.98	0.6231	0.2135
Primary surplus $(ϕ_{s})$	0.5	0.05	beta	0.4766	0.0475	0.4721	0.0472
Government deficit $(ϕ_{b})$	0.05	0.05	Inverse gamma	0.0493	0.0075	0.0544	0.0089

Note(s): 90% confidence interval

Source(s): Data derived from the conducted estimates